Chamber reacts to spending review

In his full reaction to the Chancellor’s Spending review, Paul Griffiths Chief Executive Milton Keynes Chamber of Commerce, said:

“On Wednesday the Chancellor of the Exchequer, George Osborne announced in his Spending Review and Autumn Statement a two pronged strategy of supporting business, and fuelling UK economic growth whilst addressing the issue of the deficit. This we acknowledge is the correct approach

Locally, businesses throughout the borough of Milton Keynes will welcome this announcement as one that addresses the some of the fundamentals such as infrastructure, security and the nation’s finances. With additional room for manoeuvre as a result of the Office for Budget Responsibilities (OBR) revised forecasts, the Chancellor has produced a budget which has given businesses reason to be optimistic about the future.

“Firms will have noted the Chancellor has shown his support for small businesses by announcing an extension of the small business rate relief for another year. A significant area where the Chancellor has delivered much needed investment is infrastructure, critical to the economic growth of Milton Keynes and the development of local businesses – not to mention boosting productivity.

“However the Government has extended the burden of cuts to local authorities’ as a result of the continued programme of devolution. Furthermore, larger businesses will be impacted by the apprenticeship levy which is in essence a payroll tax – used to raise additional revenues for the exchequer. The priority here must be delivering high quality apprenticeships, viewed positively by employers.

“Mr Osborne has delivered a budget which provides a degree of flexibility given that the OBR has forecasted the UK economy will return a surplus of £10bn by 2019/2020, but ultimately, it’s the delivery which counts as this is what the Government will be judged on.”

Commenting on additional measures announced in the Spending Review, Paul Griffiths said:

On supporting exporters:

“It’s disappointing that the Chancellor has not used this keynote address to the nation to announce further measures to support businesses who currently export or who are looking to do so in future. Recent results published in our Quarterly Economic Survey indicated a drop in export sales, signalling that there’s no room for complacency. Moreover, according to the British Chambers of Commerce the Government is set to miss its own target of £1trn of exports by 2020 by 14 years. As a result we eagerly await further announcements in regards to export support for businesses.

Whilst local Chambers of Commerce such as Milton Keynes Chamber of Commerce are well placed to deliver export support, advice and guidance – businesses need in-market support in order for them to break into new markets or develop existing ones.”

On business rates:

“Small enterprises throughout the borough of Milton Keynes will welcome the extension of the small business rate relief scheme which will provide support for businesses whilst the future of the business rates system is determined. However, there’s disappointment that this will now not take place until the 2016 Budget. We will continue to work with those in Government to ensure that the views of our members are taken into consideration during the on-going consultation process.”

On the apprenticeship levy:

“Although we finally have clarity over the threshold of the apprenticeship levy, it will hurt larger businesses who will have to pay what is effectively a payroll tax. It is important that the delivery of the levy doesn’t undermine other types of vocational training, which could be better suited to some businesses. The priority must be delivering high quality apprenticeships, viewed positively by employers. Otherwise this is simply another cash cow from business that will not have the desired effect.”

On investment in infrastructure:

“Businesses across the borough will welcome additional investment in infrastructure, specifically roads, rail and broadband. Milton Keynes Chamber of Commerce highlighted in its message to the Government ahead of the pre-spending review the UK ranks 27th in the World Economic Forum’s Quality of Overall Infrastructure Report. This demonstrates that much work is needed in this area if businesses are to remain competitive on the world stage.

“Businesses continue to highlight so called ‘not-spots’ where decent broadband access is a major issue. Whilst we welcome that the Government is looking to set up a broadband investment fund, delivery of decent, reliable, superfast broadband for businesses on the ground has contrasted vastly with perceptions by the Government. Action on this front will speak louder than words as businesses continue to be disappointed.

“Furthermore there’s relief that the Government has put in place a dedicated fund in order to address the nations road network, the major arteries for businesses to distribute their goods.”

On Research & Development:

“Increasing investment in science and technology is a boon to our dynamic businesses, so that they have room to grow. However, it is important that the move to replace grants with loans from Innovate UK does not reduce our dynamism in the global economy. Businesses must continue to feel empowered to evolve and expand, otherwise we risk being also-rans in the global race.

“We are pleased with the investment in health and energy research, as well as the protection of the science and research budget. This just one of the drivers necessary to maintain UK productivity – but it is equally vital that the UK does not lose its competitive advantage, and supports innovation by retaining our intellectual property.”

On Further Education:

“We are encouraged that the Chancellor has listened to the BCC call to protect adult skills funding for FE Colleges. A strong further education sector, which meets business needs, is crucial to boost productivity and make sure firms get access to the skilled staff they need.”

On housing:

“A lack of affordable housing supply is a big issue for business, impacting on their ability to recruit and retain talent. It’s therefore reassuring that the Chancellor is prioritising housebuilding on a national scale, even if we’ve heard much of this before. It is imperative that the government sets out further details on how these schemes will be implemented.”

New tax administration target to reduce the costs to business:

“The cost of complying with the UK’s complex tax system has become a major burden over recent years and so businesses across the UK will view positively the new target for cutting the cost of tax administration. The new target will rightly increase the scrutiny on HMRC, but by reducing the number and frequency of changes to the tax system the government can also play a major role in reducing tax administration.”